{"id":619532,"date":"2025-11-24T10:59:08","date_gmt":"2025-11-24T08:59:08","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=619532"},"modified":"2025-11-24T10:59:57","modified_gmt":"2025-11-24T08:59:57","slug":"one-state-owned-company-that-works-without-any-bailouts","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/business-telecoms\/619532-one-state-owned-company-that-works-without-any-bailouts.html","title":{"rendered":"One state-owned company that works without any bailouts"},"content":{"rendered":"\n
Telkom demonstrates that a state-owned company can be run efficiently and profitably through private-sector involvement.<\/p>\n\n\n\n
Telkom was founded on 1 October 1991 when the Department of Posts and Telecommunications (DPT) was broken up.<\/p>\n\n\n\n
The Department of Posts and Telecommunications was split into the South African Post Office (SAPO) and Telkom.<\/p>\n\n\n\n
At the time, it was mainly a provider of fixed-line telephony services to the business and residential markets in South Africa.<\/p>\n\n\n\n
From the outset, the South African government, through the Department of Communications, was the dominant shareholder.<\/p>\n\n\n\n
Even after Telkom was listed on the Johannesburg Stock Exchange (JSE) in 2003, where the government sold a large stake in the company, it remained the biggest shareholder.<\/p>\n\n\n\n
Today, the Department of Communications and Digital Technologies, the shareholder representative of the South African Government, owns 40.5% of Telkom.<\/p>\n\n\n\n
The Public Investment Corporation (PIC), another state-owned company, is also one of Telkom\u2019s biggest shareholders.<\/p>\n\n\n\n
Other large shareholders include M&G Investment Managers, PSG Asset Management, The Vanguard Group, and Sanlam Investment Management.<\/p>\n\n\n\n
The blend of public and private ownership sets Telkom apart from many other state-owned enterprises, like Denel, Eskom, and South African Airways (SAA).<\/p>\n\n\n\n
South African state-owned enterprises, such as those mentioned above, along with the SA Post Office and the SABC, are often poorly run.<\/p>\n\n\n\n
They are associated with mismanagement and corruption and rely heavily on government bailouts to survive.<\/p>\n\n\n\n
Telkom is different. It is well-run, profitable, pays taxes, and provides value to all its shareholders, including the government.<\/p>\n\n\n\n
Compare that to its counterpart, the South African Post Office (SAPO), which was also established by splitting the Department of Posts and Telecommunications.<\/p>\n\n\n\n
It remained under government control and became a mess. It was forced to enter business rescue despite receiving billions in bailouts.<\/p>\n\n\n\n
So, unlike Telkom, the Post Office is a drain on South Africa\u2019s finances and is widely associated with poor service levels. Very few people use it out of choice.<\/p>\n\n\n\n
Telkom is an example to other state-owned enterprises<\/h2>\n\n\n\nTelkom – Centurion Campus – Entrance Gates<\/figcaption><\/figure>\n\n\n\n
Telkom, although described as a state-owned company, is essentially privately run and competes favourably against Vodacom, MTN, and Cell C.<\/p>\n\n\n\n
Because it is listed on the Johannesburg Stock Exchange, it adheres to stringent financial standards and has a strong, independent board.<\/p>\n\n\n\n
It has also helped Telkom transform from a primarily fixed-line telecommunications provider to a fully fledged ICT provider.<\/p>\n\n\n\n
Unless it provides competitive services, people will move to another provider to serve their needs. The market will severely punish mismanagement and corruption.<\/p>\n\n\n\n
Schalk Louw, a portfolio manager and strategist at PSG Wealth, said Telkom showed what is possible.<\/p>\n\n\n\n
He said the latest Telkom results, which were overwhelmingly positive, showed that government entities can run successfully as private companies.<\/p>\n\n\n\n
Telkom published its financial results for the six months ended 30 September 2025, which showed the company on the rise.<\/p>\n\n\n\n
The Telkom Group\u2019s revenue for the six months increased 3.4% to R22.1 billion, and data revenue was up 7.9% to R13.1 billion.<\/p>\n\n\n\n
The strong top-line performance was reflected in the bottom line, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) increasing 7.4% to R6.0 billion.<\/p>\n\n\n\n
Louw highlighted that Telkom had numerous struggles over the last few years. However, the management has turned the company around.<\/p>\n\n\n\n
\u201cYou can see Telkom is reinventing itself. It includes little things like focusing on prepaid mobile services, which Vodacom and MTN do not favour,\u201d he said.<\/p>\n\n\n\n
\u201cTelkom said they would focus on pay-as-you-go services, and are using AI to get the right positioning for these products. It has done phenomenally well for them.\u201d<\/p>\n\n\n\n
Telkom demonstrates that a state-owned company can be run efficiently and profitably through private-sector involvement.<\/p>\n","protected":false},"author":23,"featured_media":570417,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[41906],"tags":[237,76860,102348,51705,96167,96169,109,78424],"class_list":["post-619532","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-telecoms","tag-department-of-communications","tag-department-of-communications-and-digital-technologies","tag-department-of-posts-and-telecommunications-dpt","tag-johannesburg-stock-exchange-jse","tag-mg-investment-managers","tag-psg-asset-management","tag-telkom","tag-the-vanguard-group"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/619532"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=619532"}],"version-history":[{"count":5,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/619532\/revisions"}],"predecessor-version":[{"id":619779,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/619532\/revisions\/619779"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/570417"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=619532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=619532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=619532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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